Megaupload files: Judge orders DoJ to cooperate with sharing site

The fate of Megaupload and the billions of files uploaded to the storage site’s servers is still up in the air, but a judge in Virginia did award a victory, albeit a small one, to the website on Friday.

Megaupload’s attorneys were at the US District Court of the Eastern District of Virginia in Alexandria on Friday to find out what will be done with the trove of files stored on the site’s servers. Ever since authorities shut down the storage site earlier this year, the personal files uploaded by as many as 60 million users of the service have been in legal limbo. On Friday, Judge Liam O'Grady told the court that all parties involved in the episode need to work together to figure out a solution.

For now, the data that was dumped onto the site by millions of subscribers will be safe from deletion — but that could change in two weeks when the court will once again consider how to proceed with the case.

Judge O’Grady told the court on Friday that all involved parties need to go back to the drawing board and negotiate further on how to handle the files that were on the servers that were frozen during the shut-down of the site in January. Representatives for the entertainment industry had wanted all data destroyed, citing that re-releasing them to the Internet and the users of the site would only further copyright infringement. The attorneys for Megaupload, on the other hand, have been asking to be allowed access to the data, claiming that files uploaded to the seized servers would help build their defense. According to Megaupload, access to the files uploaded by their users will show how often their service was used for noninfringing purposes, but the US Department of Justice insists that that is “pure speculation.”

Outside of the court, however, those most mesmerized by the legal battle are the millions of users who have been unable to access their own files since the shut-down of the site.

Federal agents arranged for a raid on the palatial New Zealand home of Megaupload founder Kim Dotcom back in January. Authorities insisted that the storage site was responsible for widespread piracy, duping the music and movie industry out of half a billion dollars. Megaupload provided a service where users could upload any file to the servers in question and then access it from anywhere with a web connection, but authorities say that that service was mostly manipulated by people sharing digital copies of copyrighted material. Those that used the service for legitimate purposes, however, have been left with no access to their original files and will have to continue to wait to find out if they will ever see them again.

Once such person is Kyle Goodwin, a video journalist who had a paid account to Megaupload. By forking over fees to the company, Goodwin was allocated space on their servers where he stored his work. Since January, however, he has been left without any of it.

"I think this case raises pretty serious questions about what happens when you store your data in the cloud and for whatever reason the government or the company decides they're not going to store your data anymore," Electronic Frontier Foundation spokeswoman Rebecca Jeschke tells PC World. The EFF is representing Goodwin in his fight for the return of his work.

The owner of the servers used by Megaupload, Carpathia Hosting, had hoped Friday’s meeting with the judge would end with federal compensation for them. For maintaining the 1,100 servers used by Dotcom’s company, attorney Marc Zwillinger representing Carpathia says they spend around $37.000 each month on maintenance. With Megaupload’s assets frozen and subscribers no longer paying for the service, they have been left with the burden since the site went down in January.

"There are a lot of people who have interest in the data on these servers, except one," Zwillinger says. "That is us."

Judge O’Grady told Carpathia’s lawyers on Friday that he was “sympathetic” with their plight, but that perhaps the millions they made by having Megaupload as a long-standing client could be put towards holding onto the servers until the court decides what to do.

The US Justice Department and the Motion Picture Association of America are currently pursuing a copyright case against Megaupload. Dotcom remains under watch in New Zealand, although authorities are attempting to extradite him to the States for prosecution.

Ira Rothkin, the US attorney for the defense, told the court on Friday that Megaupload has no problem maintaining the files until a solution for the server dilemma is reached. Jay Prabhu, an assistant US attorney involved in the prosecution, says that would be the same as "trusting the thief with the money.”